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Debt can be considered as a put option because: a.The owners of the firm can always sell the firm to another investor. b.It is always
Debt can be considered as a put option because:
a.The owners of the firm can always sell the firm to another investor.
b.It is always going to be cheaper to put the assets of the firm on the market when interest rates rise.
c.The lenders to the firm can always choose when the firm defaults and puts the assets back to them.
d.The equity holders can put the assets to the debt holders in lieu of paying off the debt.
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